Niall Ferguson: Empires Fall Quickly and Without Warning

Michael Panzner submits: In an article for the March/April issue of Foreign Affairs, "Complexity and Collapse: Empires on the Edge of Chaos," due out later this week, author and historian Niall Ferguson posits that the life cycles of great powers might not follow the long-accepted pattern of gradual rise and fall. Rather, he says, "it is possible that this whole conceptual framework is, in fact, flawed," and that empires fall quickly and without warning. With that in mind, Ferguson explores what it might mean for the geopolitical status quo. If empires are complex systems that sooner or later succumb to sudden and catastrophic malfunctions, rather than cycling sedately from Arcadia to Apogee to Armageddon, what are the implications for the United States today? First, debating the stages of decline may be a waste of time—it is a precipitous and unexpected fall that should most concern policymakers and citizens. Second, most imperial falls are associated with fiscal crises. All the above cases were marked by sharp imbalances between revenues and expenditures, as well as difficulties with financing public debt. Alarm bells should therefore be ringing very loudly, indeed, as the United States contemplates a deficit for 2009 of more than $1.4 trillion—about 11.2 percent of gdp, the biggest deficit in 60 years—and another for 2010 that will not be much smaller. Public debt, meanwhile, is set to more than double in the coming decade, from $5.8 trillion in 2008 to $14.3 trillion in 2019. Within the same timeframe, interest payments on that debt are forecast to leap from eight percent of federal revenues to 17 percent.Complete Story »

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Shutterstock.comWhen I write about the demise of unsustainable systems, readers often ask me to describe the collapse I see as inevitable.
This is a tough assignment, as there are as many kinds of collapse as there are systems: fragile ones can collapse suddenly, and resilient ones can decay for years or even decades before finally imploding or withering away.

Matthew O'Brien: Truth in the Age of Niallism:
Harvard historian Niall Ferguson still thinks bluster can substitute for facts: Here are three facts about how the 10-year budget outlook has changed in the past year: 1) the fiscal cliff deal raised $600 billion in new revenue; 2) the sequester, if left in place, cut $1.2 trillion; 3) the CBO revised its projection for federal healthcare spending down by $600 billion.

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives

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